Innovation and Commercialization Dr. H.D. Barber Distinguished Professor-in-Residence Faculty of Engineering McMaster University November 2003

Corporate R&D Expenditure in Canada – COMPANIES Sales: $264 B AV $2.2 B 77.9% of Total R&D: $1.74 B AV $14.4 M 13.3% of Total R&D Intensity: 0.66% 120 COMPANIES Sales: $72.8 B AV $607 M 21.5% of Total R&D: $10.3 B AV $85.7 M 78.8% of Total R&D Intensity: 14.1% 141 COMPANIES Sales: $537 M AV $3.8 M 0.2% of Total R&D: $903 M AV $6.4 M 6.9% of Total R&D Intensity: 168.4% 139 COMPANIES Sales: $1.34 B AV $9.5 M 0.4% of Total R&D: $139 M AV $1.0 M 1.1% of Total R&D Intensity: 10.4% >0% 3% 50%  R&D Intensity (R&D Expenditure/Sales in %) (from Research Infosource Inc.) R&D Expenditure $3 M —

Needs of Innovation-Intensive Enterprises of Canada A Canada that values more its commerce, its trade and its trading enterprises - cultureA Canada that values more its commerce, its trade and its trading enterprises - culture A larger pool of people that is more knowledgeable and skilled in the management and operations of innovation-intensive commercial enterprises – learningA larger pool of people that is more knowledgeable and skilled in the management and operations of innovation-intensive commercial enterprises – learning Greater public support in:Greater public support in: - the productivity of its internal trade and services - the quality of its border relationships, politically and economically - the commitments to develop competitive capabilities Frank leader to leader communicationFrank leader to leader communication

Canadian View of Innovation-Commercialization IDEAS RESEARCH BREAKTHROUGHS DEVELOPMENT TECHNOLOGYCOMMERCIALIZATION UNIVERSITY/GOVERNMENT LABS INNOVATIONCOMMERCIALIZATION PRIVATE SECTOR H.D. BARBER

The Innovation-Commerce Cycle SHAREHOLDERS$ REVENUE $ $ EQUITY $ INVESTMENT $ DEBT $ FINANCING $ COSTS $ Pricing FEEDBACK NEEDS INNOVATION COMMERCIALIZATION Customer Needs Ideas For Solutions Research And Development Manufacturing Services Operations Sales Customer Relations Distribution Buying Customer Fulfilment